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CU System

IAmerican BankerI Can banks learn from CU Gen Y campaign

MADISON, Wis. (3/25/11)--In an article headlined, “Does Credit Unions’ Gen Y Campaign Have Lessons for Banks”, American Bankerrecognizes how credit unions are using the Web to create local local online communities and capture the attention of young consumers. Young & Free, a campaign launched in 2007 by Canadian marketing firm Currency Marketing is a blend of social media and product promotion built around Gen Y spokespeople, or “spokesters,” who create buzz through word-of-mouth promotion. The concept is built around a contest to determine who will become the credit union’s spokesperson. Applicants create buzz for themselves--and drive traffic to the credit union’s Web page--through their meet ups, Facebook pages, YouTube videos, and tweets. The spokester is chosen through an online vote, and receives an annual salary from the credit union, plus a car to attend community events, and all the technology needed to keep in touch with the credit union’s Gen Y members. The spokester blogs, posts videos, maintains the credit union’s Young & Free web site and interacts with young members though social media. The American Banker article, which appeared March 24, wonders if banks could benefit from using the Web to build their local customer bases. Observers quoted in the article say, “Yes, but …” Ron Strothkamp, vice president and principal analyst at Forrester Research, Cambridge, Mass., said banks would have to do some “soul searching” to engage in this type of marketing. Count Tim McAlpine in the “Yes, but …” category as well. McAlpine is the president and creative director of Currency Marketing, Chilliwack, Canada. He told News Now that Young & Free is not available to for-profit financial institutions. But concedes the concept could “potentially work” at a bank. But McAlpine further explained that almost none of the Young & Free spokesters were familiar with the credit union cooperative concept when they entered the contests. “When they realized what credit unions were all about, that they were these very cool banking institutions, they knew it was something they could get behind,” McAlpine said. “They are deeply into this. They are credit union members for life.” McAlpine believes that type of passion would be hard for a big bank to create--and to make believable for consumers--but he thinks a progressive community bank, such as Umqua Bank, Roseberg, Ore., or a niche player, such as IMG, could make a play for it. Young & Free indeed appears to fit within the “service first” credit union philosophy. The concept has caught on with credit unions in seven states--only one credit union in each state can participate--and two Canadian provinces. Credit unions have traditionally had difficulty attracting Gen Y consumers. According to Javelin Strategy and Research, only 11% of Gen Yers has a primary relationship with a credit union, versus 15% for all other age groups. One of the reasons for that might be that Gen Y’s financial needs aren’t necessarily found on a traditional products and services menu. “Of course, everyone needs a checking account, but a lot of young people need help with budgeting,” Jessica Emert, marketing director ORNL FCU, Oak Ridge, Tenn., told News Now. ORNL FCU is a Young & Free participant. “That’s not a product we traditionally offer, but it’s a service we can definitely help them with.” Emert said her credit union’s Young & Free spokesperson, Alex Oliver is “fantastic.” She admits marketing to Gen Y can be resource intensive, but she’s hopeful Young & Free has helped her credit union build long-term relationships. “We will be there when it’s time for them to get car loans, start saving and get mortgage loans,” Emert said. “You have to take the time to connect with people first.”